Second quarter slowdown hits results at specialist flooring company
Ossett-based flooring specialist, Airea, has seen its group revenue drop by 5.6% to £9.3m (2023: £9.8m) in its interim results for the six months ended 30 June 2024.
The business also records its operating profit decreasing to £0.2m (2023: £0.8m). It explains this was heavily impacted by a sales slowdown in the second quarter, non-recurring costs associated with new investment and ongoing strategic investment for future growth. EBITDA decreased to £0.6m (2023: £1.1m).
Martin Toogood, non-executive chairman, said “The year started well, with strong demand for our carbon-zero and low-carbon product ranges in the first quarter.
“The group then experienced an unforeseen slowdown in the second quarter, with international sales impacted by ongoing economic and geopolitical concerns. UK and ROI sales were less impacted, performing slightly ahead of the overall market trend.
“The group had an encouraging start to the third quarter, with positive trading in July and August finishing with a strong order book. We anticipate continued improvement in trading during the second half with several new product launches scheduled and the group is trading in line with the Board’s recently revised expectations for the full year.
“The Board remains confident in the group’s long-term prospects as we focus on successfully delivering the investment in our manufacturing facility in early 2025.”
Médéric Payne, chief executive officer, said: “We knew this year would be difficult because we’ve been making a £5m investment in our factory. But these new machines will go live in the middle of February next year and they will double our production capacity.
“Our old machines were made in the 1980s and ’90s and were nearing the end of their life. The new machines will mean fewer stoppages and less unplanned costs.”
Payne said the second quarter had been difficult, as it had seen clients “holding their breath” for about six weeks before the UK General Elections, resulting in projects being postponed. But he noted Airea’s competitors had also suffered.
“We should be in a good position for next year and our teams have not let the major project in our factory stop them from keeping up with deliveries – we haven’t been late on customer orders,” he said.
“Some of our markets in places such as Qatar, Saudi Arabia, the United Arab Emirates and Oman are booming in terms of property and building works.
“So long as the Middle East conflict doesn’t become a bigger regional war we should do well.
“In the UK a lot of smaller customers are tight on cash and we get many last minute orders coming in, which isn’t easy to forecast, but we’re still being able to respond to them.”
